Question

As with most bonds, consider a bond with a face value of $1,000. The bond's maturity is 19 years, the coupon rate is 15% paid annually, and the discount rate is 17%. What is the bond's Current Yield? Enter your answer as a percentage, without the '%' sign, and rounded to one decimal. For example, if your answer is 0.031416, which is equivalent to 3.1416%, just enter 3.1.

Answer 1

c12 : x =PV(C9,C7,C5,C2)*-1 1,000 15% 1/ $ 150 fix B 1 Face value (FV) 2 Coupon rate 3 Number of compounding periods per year 4 = 1*2/3 Interest per period (PMT) 5 Number of years to maturity Number of compounding periods till maturity 6 = 3*5 (NPER) 7 Market rate of return/Required rate of return Market rate of return/Required rate of return 8 = 7/3 per period (RATE) Bond price 6 19/ 1 17% 9 10 17% PV(RATE,NPER,PMT,FV)*-1 12 Bond price 888.31 14 Current yield Bond annual coupons Bond price Current yield 16.9%

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